Growth starts with making Maine competitive

Gov. Paul LePage (right) administered the oath Friday, June 3, 2011, to George Gervais as Commissioner of the Department of Economic and Community Development.

By George Gervais, Special to the BDN •July 24, 2013 3:18 pm

We all want a robust economy. I have never met a Mainer who is opposed to improving our economy. The disagreement comes when we talk about how to accomplish that.

However, most Mainers agree that a thriving private sector plays a critical role in achieving a strong and healthy economy. Can you imagine a booming economy led by mostly failing companies? It just doesn’t happen.

That’s why Gov. Paul LePage’s administration pushes policies designed to attract, retain and appreciate companies that create jobs for Mainers. We have already cut taxes, removed unnecessary regulatory burdens and implemented a business-friendly attitude that has not only transformed state government, but has been adopted by dozens of our cities and towns across Maine.

This is a good start, but we need to do more. If Maine is to attract more investment and create more jobs, we need to become competitive.

A July 17 article in this newspaper — “20 years of plans for Maine’s economy, but where’s the progress?” — leads readers to believe that a carefully crafted, broad-based, long-term economic development strategy would somehow turn Maine into an economic power. Actions speak louder than words. The reality is we need to transform how Maine does business — and that starts here in Augusta.

We’ve all heard the definition of insanity sometimes attributed to Einstein: Doing the same thing over and over again and expecting different results. We simply cannot keep repeating the same strategies with an expectation of anything but stagnation.

Several state economic development strategies have been proposed since 1987. Solid economic plans are articulated in each. But after nearly three decades, we are all still demanding improvements. And we should. We need to focus on what will really make Maine more competitive and more prosperous.

The article points to other states that have successfully sparked job growth. Four of these states — Florida, Indiana, Oklahoma and Tennessee — are “right-to-work” states; Florida and Tennessee have no income tax, and Oklahoma just cut its income tax rate. The states cited in the article all enjoy lower tax burdens, they have better business-climate rankings, and they have lower energy costs.

These states have prospered by enacting the same policies that the LePage administration has been pushing. But the Legislature continues to block these initiatives. The Legislature rejected right-to-work laws, and they voted last month to override the governor’s budget veto, choosing instead to increase taxes on Maine people.

The Legislature also failed to make substantial progress toward reducing our electricity and heating costs. These actions do not make Maine more competitive. On the contrary, it sends a message that Maine does not get it, that our state does not want to compete.

Another expert quoted in the article said, and rightfully so, “what distinguishes successful states over non-successful states are those folks tend to be aligned.” Maine’s business community is aligned with much of what the LePage administration has accomplished and what it still seeks to implement.

The LePage administration is fighting to improve our education system, develop our workforce, lower our overall tax burden and reduce our energy costs. The administration is working to market our state through a unified Maine brand and get more Maine products to markets across the globe, while attracting more foreign investment.

But the Legislature is way out of alignment. Legislators continue to propose job-killing bills that would hurt Maine businesses, such as increasing costs to workers compensation, mandating automatic increases to the minimum wage and authorizing a state-run bank to compete with the private sector.

For any state, economic success depends first and foremost on how a state competes. Both government and the private sector play critical roles in creating an improved and robust economy. The role each plays is different, but very much interrelated. One simply will not improve without the other.

We can continue to improve our roads and bridges, pour bond money into our downtowns and pass out research grants like candy. But first, let’s prepare for success by positioning Maine among the nation’s most competitive states, just as the states cited in the article did. Only then can we take the return on investment to the bank.

George Gervais is commissioner of the Maine Department of Economic and Community Development.